Roger Penske: Well, look, we’re getting to electrification. I’m glad I’m not running the business, what I’m going to make on electric vehicle for the rest of the year. But why don’t Randall talk a little bit about Tesla and what’s going on in the EVs in the U.K. I think he’s got good color on that.
Randall Seymore: Yes. So in the U.K., there’s been government subsidies for several years now, and the total market is about just over 16% BEV. Our business year-to-date is 20% BEV with our premium luxury mix. What’s interesting on that as well as since they’ve been subventing the government for four years, we’re – that’s the first market working where we’re seeing a bonafide trade cycle of used BEV. We’ve been hovering about a 50, 52, 53 days supply of BEVs, which is about 375 units and that only represents about 6% of our total used inventory. So our exposure there is not massive. But interestingly, at the beginning of the year, late January, we had north of 600 units in stock. And when Tesla announced their price reduction that had a ripple effect on the used side as well, even though we weren’t exposed to Tesla as a brand unused certainly hit all BEVs. So, we just need to be eyes wide open.
We’ve got to turn these things quicker. And then as a consumer, if you buy a four-year old BEV, it’s just interesting to say, what’s the range going to be like after that time from a degradation standpoint? And then if there’s a warranty situation, what are the associated costs there excuse me, if it’s an out of warranty situation, what are the associated costs. So look, we’re – and then I just hit a couple of other markets. Germany is about 16% as well and government subsidies, interestingly, you go to a country like Italy, where there’s not a lot of government subsidy and the market is only 4%, and we would even be less than that from a from a PAG standpoint. So interesting between the different markets.
Roger Penske: I think that also, when you look at it, talk a little bit about in the international markets, the impact of the governmental support, I think, think about that from a from a tax perspective in the U.K.
Randall Seymore: Well, it’s a follow-the-money scenario. So in the U.K., a lot of people will have their vehicle as a company benefit and they provide a significant tax relief if you have a BEV, which is not quite zero, but maybe £50 for tax where you’ve got a BMW 3 Series, that may be $300 per month in tax. So there’s a real benefit to have that BEV from a tax standpoint, similar in Germany, like I said, I mean the government subsidies there some of these other countries where it’s not. So you could call a little bit artificially buoyed on where the government subsidies are.
Roger Penske: Yes. And I think when you look at the U.S. EQS for Mercedes, we’ve got 190-day supply right today at to sit here overall on BEV for MB we had 113. So, we’re seeing affordability and pricing be a critical period from the standpoint of our business. And I know there’s been some questions in the past I’ve heard this week from the other — our peers talking about what part of our business is do we sell from a 100% or MSRP. We’re running at about 54% year-to-date. If you take out you take out both hybrid and BEVs, we’re at 70%. So you can see that the noise of the business, the PR from the OEMs and the supply is much greater than the marketplace. So, I think it’s something that we really have to look at as we go forward over the next several quarters.
